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The road to clean energy in Rwanda

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In Rwanda, like much of Sub-Saharan Africa, less than 25 per cent of the population has access to electricity. Without easy access to light at night to do homework or tend to a crying baby, there are huge education and health costs to a lack of electricity.

Without being able to run a business during the evening or to power a grain mill or welder, there are also serious economic costs. These aren’t just costs in Rwanda – these are costs for most of Sub-Saharan Africa and for large parts of South Asia. A billion people lack access to energy, and how they get access matters. It needs to be both low cost and sustainable for their sake and for the world’s sake.

Our initiative is called the Sustainable Energy for Economic Development, or SEED and along with the rest of our team, I’ve spent many months talking with government officials, visiting power plants, meeting small companies working in the country, and speaking with development agencies.

From our perspective, there are two big, connected aspects of providing energy access in Africa:

clean and cost-effective on-grid energy, and

smart, clean and distributed off-grid energy

Virgin Unite, Carbon War Room, RMI, Sustainability

Image from Provided by Powerhive

“On-grid energy” refers to the power plants, transmission lines, and distribution network that takes diesel, or better yet, sun, at the power plant, and gets it reliably to the customer. The SEED team is focused on ensuring Rwanda has what it needs on its grid, and if it doesn’t, making the right plans to develop it.

Like any other industry, in energy it’s all about predicting demand and matching it with cost-effective supply. The cost of overpaying for electricity, not taking advantage of inexpensive renewables, or building an unnecessary coal plan can add up to millions or billions of US dollars.

Increasingly, for African countries just as for the rest of the world, renewable options like solar are actually cheaper than fossil-fuel alternatives (solar power in Zambia, for instance, is up to 5x cheaper than diesel power).

Off-grid energy refers to a whole new set of energy-producing products that have emerged in the last decade

But to incorporate renewables, the Rwandan government needs to know what a fair price to pay for solar is, and how to integrate it in a way their power grid can handle.

It’s not easy to provide steady power from a solar plant when clouds pass overhead, and without the proper planning and training, unbalanced solar power can be wasted on the grid. So we worked with the government and utility to develop and implement a plan that uses a combination of cost-effective resources like solar to provide reliable and reasonably-priced clean electricity to power their grid.

Virgin Unite, Carbon War Room, RMI, Sustainability

Image: Kelly and Stephen Doig, Managing Director of SEED

“Off-grid energy” refers to a whole new set of energy-producing products that have emerged in the last decade - small solar-battery consumer products called “solar home systems,” and slightly larger “minigrids” that operate independently from the existing power grid. This has been my focus in Rwanda.

With the falling costs of solar and battery storage, it’s actually possible to get electricity to someone in a remote Rwandan village using these systems more cheaply and more quickly than extending the traditional grid. It’s not just a good idea - it’s good business.

As evidence, two leading off-grid companies in East Africa have attracted over $60 million in equity investment in the last two years. For these companies to grow even more quickly, there needs to be predictable and fair regulation that will encourage a healthy, competitive market. They also need customers to understand what solar is, and how to pay for it. For the customers they’re looking at, this is often the very first major purchase they’ll make in their lives. How do you ensure they’re informed? How do you establish credit-worthiness? How do you collect payments? These are hard questions. With a bit of our help, the Rwandan government is addressing some of these issues, and development partners are exploring options to provide lower-cost debt to help these businesses grow.

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We’re still figuring out what it takes to successfully increase access to electricity in developing countries but we’ve learned a few lessons from Rwanda:

It’s important to align goals and incentives across government and private sectors

Facilitating clear communication between government, private sector, and development partners is a big part of the task

Providing actionable advice is the key to, no surprise, action

Aligning investments around a common and clear plan can avoid the huge amount of waste that results from uncoordinated one-off efforts to build projects

In the next year, the SEED team is expanding our work to additional countries with the goal of replicating the success in Rwanda. If you would like to be a part of the conversation - visit our website, or follow our organization on Facebook or Twitter.

This blog is part of a series of stories that highlights the serious efforts people are making to improve lives through energy access. Read the other blogs in the series by: